Reaction to Yahoo's Microsoft-inspired poison pill: 'That's nuts'

Reaction to Yahoo's Microsoft-inspired poison pill: 'That's nuts'

Summary: Yahoo's poison pill--adopted by the company to thwart a Microsoft takeover--was deemed "nuts" by outside consulting firm Compensia.That nugget was the big takeaway from an unsealed complaint (Techmeme and PDF of suit) by Bernstein Litowitz Berger & Grossmann, a Michigan lawfirm suing Yahoo on behalf of shareholders for failing to consummate a merger with Microsoft.

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Yahoo's poison pill--adopted by the company to thwart a Microsoft takeover--was deemed "nuts" by outside consulting firm Compensia.

That nugget was the big takeaway from an unsealed complaint (Techmeme and PDF of suit) by Bernstein Litowitz Berger & Grossmann, a Michigan lawfirm suing Yahoo on behalf of shareholders for failing to consummate a merger with Microsoft.

Yahoo had fought to keep the complaint confidential to no avail. As a result, Bernstein Litowitz Berger & Grossmann made the complaint public. The tale details the lengths Yahoo went to create a poison pill that would deter Microsoft's bid for the company. In a nutshell, Yahoo's compensation plan gave any employee accelerated vesting rights in the event of a merger. In fact, the complaint argues that employees would have been better off if they lost their jobs. As a result, Bernstein Litowitz Berger & Grossmann argues that Yahoo didn't represent shareholders as CEO Jerry Yang ran roughshod over the board's compensation committee.

The festivities begin on page 18 of the PDF.

Here are the key excerpts:

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And.

suit2.png

And.

suit3.png

Meanwhile, this nugget details what Microsoft would have been hit with if it bought Yahoo.

suit4.png

Add it up and there is enough detail to annoy large shareholders. The big question is whether they'll toss Yahoo's board.

Topics: Enterprise Software, CXO, Legal, Microsoft, IT Employment, Social Enterprise

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17 comments
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  • To satisfy a Billionaire's EGO

    it is amazing how easily big company executives and government leaders(??) can spend money to compete with one another - especially considering it is not their money to start with.

    Eventually these costs will (partially) be absorbed by mutual shares and we will each contribute our 2 dollars. There is no computer or technology discussion here (as in ODF-OOXML) - just the egos of the super powerful.

    anyone got a $1.50 for coffee ???
    bcarpent1228@...
  • Can't get past the employee part...

    It was truly written by people that don't understand what was going to happen on the inside for the employees. There was not going to be some smooth transition and retention if MS was going to start implementing their technology. And it would only make sense that they try to belittle the technology in use at Yahoo as much as possible. So while shareholders have their rights they may want to realize that they aren't jack without a workforce.
    storm14k
    • You don't know what MS was going to do.

      They didn't want to buy Yahoo just to kill it off. They obviously thought Yahoo was on to something and just wanted a part of it.

      There was just as much a possibility that MS would leave the Yahoo technologies and employees in place as not. If MS thought MS had it figured out how to do it right they would have never put in a bid.

      Yang jerked everyone around because of his ego.
      bjbrock
      • Wrong....

        M$ may have kept the employees...but what they worked on would have certainly changed. It wouldn't make sense for them to just keep working on the "same stuff", since yahoo has not exactly been overwhelming the market with its biz results lately. M$ would *have* to do something new with the yahoo properties in order to gain anything from the deal...there would be some type of integration of yahoo & M$ turf...something...in order to have a generative effect beyond the current lackadaisical YHOO earnings.
        Techboy_z
  • RE: Reaction to Yahoo's Microsoft-inspired poison pill: 'That's nuts'

    I disagree.

    See, it's all about Money.

    MS wants more cash, specifically search ad revenue. It would make no sense to do a massive conversion of yahoo to an MS platform, when their goal is to keep the ads coming.

    Sure, EVENTUALLY, they'd like to convert. But it would be a slow, gradual project. Remember how long it took them to convert hotmail? (And remember how big of a fiasco it was?) MS isn't soon to repeat that.

    Not that a Yahoo merger is in the cards anymore.
    FearTheDonut
  • I could <i>never</i> conscionably work for MS...

    ...and my guess is that the people at Yahoo couldn't either.
    Henry Miller
    • You are a tool....

      You are nothing but a tool!

      What an absolute stupid, ridiculous, naive, childish and sweeping statement to make.

      Have you ever worked for Microsoft and how many Yahoo employees have you polled?

      Grow up.
      Martin_Australia
      • I wouldnt either

        I have not worked for yahoo, but have had to do enough work with MS to make never want t work for that company. The only exception may be the xbox team, as its run very differently from the rest of the company.
        Stuka
      • Wow, what a completely moronic statement

        He says "I could never conscionably work for MS..."
        and you respond with

        "What an absolute stupid, ridiculous, naive, childish and sweeping statement to make."

        So you think it's stupid and ridiculous to make employment decisions based on one's personal moral foundation? Sounds like you'd do well in the mafia, or working for a drug cartel.

        It's not a sweeping statement, it's one person stating his opinion about one company.

        "Have you ever worked for Microsoft..."
        So if someone says "I could never smoke cigarettes" are you gonna howl about how unfair it is if they haven't tried it? Thought not. Stupid of you. Very stupid.

        "...and how many Yahoo employees have you polled?"
        Another bone-headed stupid remark. He CLEARLY stated that he was expressing his OPINION. He doesn't NEED a poll to express his opinion. How many people did you poll about calling him a "tool?" None. Why does he need polls when you don't?

        "Grow up."

        This from the guy who launches into a vicious ad hominem attack and calls someone a "tool" just because they say they wouldn't work for Microsoft? The irony of your middle-school response is not lost on us.
        bmerc
        • You're equating Microsoft with drug cartels, the mafia and smoking

          Do you understand that? Do you realize how utterly lost you are in terms of objectivity when you think that a MORAL OBJECTION to Microsoft equivalent to nazis, drug cartels, and the mafia is rational?
          mlambert890@...
          • Objection to your objection

            Since you are objecting to another's objection to someone else's objection, your objection is just as objectionable as was the original objection, with none of the objectionable logic.
            Ole Man
          • May have some merit

            From what I have seen of Microsoft's business practices, the comparison may have some merit.
            don3605
          • And yet...

            There was no equation made between MS and organized crime or smoking. Variables could have been used just as well, but things to which most or many people would have a negative reaction were chosen for illustration.

            Perhaps the poster may actually equate organized crime with MS, but it does not necessarily follow from the comments made.

            Seems like anyone not on the MS pep-squad has to be labeled as a basher these days.
            seanferd
  • RE: Reaction to Yahoo's Microsoft-inspired poison pill: 'That's nuts'

    Er, if this were true then presumably Mr. Yang wouldn't have needed to take such drastic action to make sure it was in said employees' significant financial interest to depart immediately.

    Sigh.

    [And yes, I have now worked at MSFT for 17 years, and no, my opinions aren't their opinions, and yes, I go to work every day and somehow can't find the evil people, and yes, none of you who think MSFT is an unmitigated cesspool of scum and villany are going to be in the least persuaded by my saying it's not, so why do I bother...]
    PreventRage
    • Actions speak louder than words NT

      NT
      Ole Man
  • RE: Reaction to Yahoo's Microsoft-inspired poison pill: 'That's nuts'

    The bigger problem is that the management of Yahoo has now created a employment pandora's box where a group of disaffected employees could tie up the company in court arguing that there's been a philosophical, metaphysical, or whatever change in control of the company and now they can walk out with big checks. This is California where the case would be adjudicated, so who knows what the 9th circuit will ultimately accept as meeting that criteria. Sounds like time to start moving my portfolio around a bit.
    keith.wiley@...
  • Not nuts...

    Maybe shareholders aren't the only ones who have "rights".
    Techboy_z